SoFi CEO Sees Opportunity in Trump’s 10% Credit Card Cap Plan

President Donald Trump proposed a 10% cap on credit card interest rates for one year, saying it would stop companies from charging 20% to 30% or more on carry-over balances. SoFi CEO Anthony Noto said this plan would likely lead to less credit from card issuers, creating room for personal loans to step in. The idea needs approval from Congress and has split opinions in the finance world.

Background

Credit card interest rates now average just under 20%, based on data from Bankrate. Rates can climb higher for people with missed payments or big balances. Trump made the proposal in a Truth Social post last Friday. He wrote that his administration would no longer let credit card companies rip off the public with high rates.

This comes as many Americans carry credit card debt. High rates make it hard to pay off balances, especially when people use cards for rewards like cash back or points. SoFi, a digital bank, offers personal loans from $5,000 to $100,000. Borrowers can get answers on applications the same day. The company's loans often start at rates around 8.75%, lower than most cards but above the proposed cap.

Trump's plan targets carry-over balances, the amounts people do not pay off each month. A Vanderbilt University Law School study from late 2025 said a 10% cap could save Americans $100 billion in interest payments each year. But banks say they would lose money and change how they offer credit.

Key Details

Anthony Noto, CEO of SoFi, posted on X right after Trump's announcement. He said card issuers could not stay profitable at 10% rates. People would still need credit, he added, and that gap would suit SoFi's personal loans.

"If this is enacted—and that's a big if, though part of me hopes it is—we would likely see a significant contraction in industry credit card lending. Credit card issuers simply won't be able to sustain profitability at a 10% rate cap. Consumers, however, will still need access to credit. That creates a large void—one that SoFi personal loans are well positioned to fill." – Anthony Noto, SoFi CEO

Noto also stressed the need for strong checks on who gets loans and better education for borrowers if the cap happens.

Opposition from Banks and Investors

Banking groups pushed back hard. The American Bankers Association and others issued a joint statement. They said a 10% cap would cut credit for millions of families and small businesses who use cards. These are the same people the plan aims to help, they noted.

Billionaire Bill Ackman, CEO of Pershing Square Capital Management, called the idea a mistake. In a now-deleted X post, he warned that lenders would cancel cards for many people. Those folks might then turn to loan sharks with worse rates and terms. Ackman later posted again, saying lower rates are a good goal but capping at 10% would hurt subprime borrowers the most. Subprime means people with lower credit scores.

SoFi loans go mainly to those with good credit, scores from 680 to 850, averaging 730. The average American score is 715, per FICO. People below that might not qualify for SoFi and could end up with payday loans or car title loans, which have high fees and short terms.

SoFi lets borrowers choose loans with up to 7% origination fees to get lower interest. Not all lenders do that. Card companies might cut rewards or raise fees to offset losses from the cap.

What This Means

If Congress passes the cap, credit card companies may offer less credit overall. They need high rates to cover losses from defaults and make profits. A drop to 10% could force them to tighten lending rules. This hits riskier borrowers first, those with past misses or high debt.

Personal loan providers like SoFi could see more business. Their rates beat cards now, and fixed terms might appeal to people shifting from revolving card debt. But not everyone qualifies. Lower-score borrowers face fewer options, possibly riskier ones outside banks.

The plan lasts one year, but effects could linger. Banks say it pushes people to less regulated lenders with higher costs. Supporters see savings on interest. Congress has not acted yet, and details remain thin. Finance leaders watch closely as talks continue.

SoFi shares trade under SOFI. The company grew by offering loans and banking online. Noto's view shows how some lenders see upside in the change. Others fear wider harm to credit access. The debate weighs cheaper debt against availability for all.